Farewell to a cabinet of capitalists

Buried in the inside pages of the Nation some time last year was a small piece on a development with profound consequences for the economy.

The National Economic and Social Council, it said, had rejected a formula designed to control fuel prices.

That session was chaired by Prime Minister Raila Odinga. There’s a slight problem there because, as is well known, the PM’s family is a substantial investor in the local energy industry.

That, of course, does not mean that Mr Odinga had any role in deciding on that policy. Nor does it infer that he acted in self-interest. But there is certainly the appearance of a conflict of interest.

One of the best things about the new Constitution is the provision that Cabinet ministers will be appointed from outside Parliament.

But, in vetting those appointees, MPs must make sure that they do not have any business interests directly connected to their dockets.

This is not the case in the current Cabinet. Uhuru Kenyatta, for example, has defied expectations and been a fairly good Finance minister.

Policy successes
The directive barring ministers from being driven around in monstrous Mercedes Benz limousines is one of the most underrated policy successes in the last few years.

It is not about the actual savings achieved but the image it projects of government.

As I learnt from Michela Wrong’s It’s Our Turn to Eat, in coastal Kiswahili, looters are known as wabenzi. So it’s a good thing that most official GK vehicles are off the road. But the point is about conflict of interest.

The Finance minister’s family is said to be a substantial investor in many industries, including the financial services sector. So can everyone be confident that the minister does not give a fleeting thought to these investments when making policy decisions?

I do not want to get any lawyers busy with this, so again I hasten to emphasise that it is merely the appearance of a conflict of interest referred to here rather than any actual conflict.

This situation is replicated virtually across the Cabinet with ministers who happen to be flower farmers, bank owners, road contractors, etc.

The danger here is that government comes to be seen through a Marxist lens as a committee of the owners of capital making decisions in their own interests.

But neither is it true that a Cabinet of paupers would necessarily be a roaring success. Eighteen of the 23 Cabinet ministers in Britain are apparently millionaires.

But their political culture is advanced enough to have inbuilt checks and balances that would make it exceedingly difficult for them to shape policy for private benefit.

Contrast that with a young democracy like, say, Montenegro. According to a recent New York Times story, the country’s Prime Minister Milo Djukanovic has vast business interests, including a stake in one of the country’s largest banks. When the financial crisis struck, the bank received an emergency loan of 44 million euros, saving it from collapse.

Mr Djukanovic maintains that the loan was perfectly regular, although his bank was the only one that received such a loan. That’s just a tiny illustration of the perils of having a Cabinet of capitalists.

Personal stake

After 2012, civil society and Parliament must agitate for the appointment of ministers who do not have a personal stake in the areas they will be overseeing.

That way, you will have more mwananchi-friendly interventions, such as the Communications Commission of Kenya rate cut which allowed Zain to offer the low telephone charges that have set off a price war in the sector.

And maybe those Cabinet secretaries will endorse the proposed formula to check fuel prices, which seems to be working perfectly well in countries such as South Africa, where the government sets a standard pump price dictated by variables such as international crude prices.

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